Government

You are currently browsing the archive for the Government category.

Why Government Stimulus Doesn’t Work

August 3, 2010 in Economics by Greg | 1 comment

The broken window fallacy helps explain the unintended consequences of government stimulus. In 1850, French political economist Frédéric Bastiat wrote about this misconception in an essay entitled Ce qu’on voit et ce qu’on ne voit pas or “That Which Is Seen, and That Which Is Not Seen.”¹ Below is a short video that explains this fallacy.

In 1946, noted economic journalist Henry Hazlitt wrote about the seeming “benefits” of this type of destruction:

So we have finished with the broken window. An elementary fallacy. Anybody, one would think, would be able to avoid it after a few moments’ thought. Yet the broken window fallacy, under a hundred disguises, is the most persistent in the history of economics. It is more rampant now than at any time in the past. It is solemnly reaffirmed every day by great captains of industry, by chambers of commerce, by labor union leaders, by editorial writers and newspaper columnists and radio commentators, by learned statisticians using the most refined techniques, by professors of economics in our best universities. In their various ways they all dilate upon the advantages of destruction.

Though some of them would disdain to say that there are net benefits in small acts of destruction, they see almost endless benefits in enormous acts of destruction. They tell us how much better off economically we all are in war than in peace.²

Some 64 years later, the illusion of the broken window continues to be used in government public relations.

Sources:

“The Broken Window”. Ludwig von Mises Institute. 2 Nov 2009.↩
Economics in One Lesson. New York: Pocket Books, 1952.↩

Wikileaks and American Empire

July 28, 2010 in Foreign Policy by Greg | 5 comments

Recently, Wikileaks released a document set called the Afghan War Diary. The documents purportedly provide insight into the continuing growth of the American empire. Andrew J. Bacevich, professor of history and international relations at Boston University, countered:

Based on initial press reports, the leaking of “90,000 classified documents” related to the Afghanistan war doesn’t really tell us much that we don’t already know. Our Afghan partners are less than reliable. Nation-building is a painstakingly slow enterprise. At least some Pakistanis are playing a double game. NATO forces continue to kill non-combatants, despite universal acknowledgment that doing so alienates the people whose affections we are desperate to win. The insurgents are on the march. Who, if anyone, is likely to find any of this news? Does it come as a shocking revelation to learn that U. S. special operations forces are conducting secret raids aimed at eliminating Taliban leaders? . . .

For months on end, Washington has fixated on this question: what, oh what, are we to do about Afghanistan? Implicit in the question are at least two assumptions: first, that something must be done; and, second, that if the United States and its allies can just devise the right approach (or assign the right general), then surely something can be done.

Both assumptions are highly dubious. To indulge them is to avoid the question that should rightly claim Washington’s attention: What exactly is the point of the Afghanistan war? The point cannot be to “prevent another 9/11,” since violent anti-Western jihadists are by no means confined to or even concentrated in Afghanistan. Even if we were to “win” in Afghanistan tomorrow, the jihadist threat would persist. If anything, staying in Afghanistan probably exacerbates that threat. So tell me again: why exactly are we there?¹

A day later, Francis Shore provided his own insight into American hegemony in the region:

Wikileaks and American Empire »»

“The New Republic: The Significance of the Wikileaks”. 26 Jul 2010. NPR; hereafter Significance of the Wikileaks.↩

John T. Flynn on American Fascism

July 20, 2010 in Fascism by Greg | 3 comments

The growth of fascism in America was noted by Robert Higgs in the post Participatory Fascism. Prior to this, American journalist John T. Flynn – like Friedrich A. von Hayek – warned near the conclusion of WWII how this state of events might transpire:

Fascism will come at the hands of perfectly authentic Americans, as violently against Hitler and Mussolini as the next one, but who are convinced that the present economic system is washed up and that the present political system in America has outlived its usefulness and who wish to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyze opposition and command public support; marshaling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination all to be done under the authority of a powerfully centralized government in which the executive will hold in effect all the powers with Congress reduced to the role of a debating society. There is your fascist. And the sooner America realizes this dreadful fact the sooner it will arm itself to make an end of American fascism masquerading under the guise of the champion of democracy.¹

Flynn predicted the ominous effect of unlimited government spending over time:

Continuing this policy will no longer run with the great current of desire in America. Regulating business, cutting in as the partner of industry, repressing the labor unions that were encouraged to action, satisfying the aged who were lured on to dream of abundance—all this will present a problem that will call for such drastic impositions upon every section of the population that nothing short of a totalitarian government supported by the weapons of ruthless coercion and the will to use them will bring compliance from the people. We shall presently be presented with the final crisis—the necessity of taking the last few steps of the last mile to fascism in some generated crisis, of ending the prologue and running up the curtain on the swelling theme—or of calling off the whole wretched business in some costly, yet inescapable, convulsion.²

What were Flynn’s intentions? According to Ronald Radosh,

John T. Flynn on American Fascism »»

As We Go Marching. New York: Doubleday and Company, Inc., 1942. 252-253.↩
Ibid. 257.↩

KSL’s Coverage of Bob Bennett and the Tea Party Movement

May 16, 2010 in Constitution by Greg | 17 comments

KSL’s recent coverage of the ouster of Senator Bob Bennett from the United States senate apparently as a result of the Tea Party’s activism appears superficial and is noteworthy for a number of reasons. For example, on Friday night editorial director Duane Cardall read the following statement:

Senator Bob Bennett has served the people of Utah well for nearly 18-years.

It’s unfortunate the general populace didn’t have opportunity to decide whether or not he should be retired at the end of his third term. Instead, his fate rested in the hands of a few thousand delegates at last weekend’s state GOP convention who seemed determined to defeat him, whatever the cost.

Senator Bennett certainly has solid conservative credentials, but also an understanding of the art of political compromise and the ability to work closely with those of all persuasions. It is a gift sorely lacking in today’s divisively toxic political climate. And, sadly it is an attribute that likely contributed to his defeat as anti-Washington fervor spreads across the nation.

KSL doesn’t endorse candidates, and our criticism of what happened last Saturday should not be construed necessarily as support for Senator Bennett’s re-election. Our concern is the way he was so unceremoniously, even boisterously defeated by a system that rewards extremist rhetoric more than rational dialogue. That this dedicated and capable public servant would be roundly booed, even vilified by resolution, speaks volumes about the tenuous nature of politics today.

For all he’s done for Utah, Bob Bennett deserved better.¹

While the editorial rightly pointed out the polarizing nature of political debate in a two-party system, it entirely missed the point that Utah citizens deserve more from its elected officials. Senator Bennett serves in the senate at the behest of the citizens of the state – not the other way around. Also, while political compromise may seem laudatory, at what point do the statist policies of an ever encroaching government end and personal responsibility and accountability stand firm?

State delegate Connor Boyack recently commented on the senator’s seeming lack of principle:

Bob Bennett and the Tea Party »»

“Senator Bennett”. 14 May 2010. KSL.com. 16 May 2010.↩

Supreme Court Nominee Elena Kagan

May 11, 2010 in Constitution by Greg | 3 comments

The process for approving President Obama’s supreme court nominee Elena Kagan has become a significant news item of late. For example, today’s civics “Lesson Plan” at the New York Times suggested a methodology for reviewing Ms. Kagan’s nomination in order to help students “determine whether they believe she should be appointed to the bench after learning about her experience, background and stances. They then develop a ‘game plan’ for supporting or opposing the nomination.”

Below is an excerpt of how they suggest teachers approach discussing the nomination with their students:

Ask students to share what they already know about the U.S. Supreme Court using such questions as: What do Supreme Court justices do? What is judicial review? What does it mean to interpret the United States Constitution? How does a person become a Supreme Court Justice? Why are a nominee’s political leanings and judicial ideology a matter of interest and concern, particularly to members of the Senate?

Next ask students to brainstorm the qualities and experience they think a Supreme Court justice should have, given their understanding of the position. List these on the board and discuss them briefly.

Then ask students to share what they have heard or read about Elena Kagan, such as her experience as U.S. Solicitor General or dean of the Harvard Law School. If students do not mention it themselves, tell them that Ms. Kagan has not served as a judge, which is not a requirement. Indeed, though most Justices have had judicial experience prior to their Supreme Court appointments, 40 (out of 111 total) have not, including chief justices William Rehnquist (who immediately preceded Chief Justice Roberts), Earl Warren and John Marshall.¹

The article goes on to suggest other ways in which to view Ms. Kagan’s nomination.

In some respects, this lesson contains information that bears some similarities to a talk given by Rex E. Lee, former Solicitor General in the Reagan administration, almost 20 years ago in a devotional address at Brigham Young University. In that talk, he suggested the consequences attendant to interpreting the Constitution and the importance of pending judicial nominees:

One of the most important features of the American Constitution, both in theory and in practice, is the magnificent breadth of its most important provisions–notably the commerce clause, most of the Bill of Rights guarantees, and the Fourteenth Amendment’s due process and equal protection clauses. The lack of specificity of these and other provisions has almost certainly been essential to the ability of this document drafted in 1787 to survive over 200 years of the largest and most unanticipated change that any country at any time has ever experienced.

Supreme Court Nominee Elena Kagan »»